Opening the doors to prosperity

Due to a series of new economic policies, China is rapidly growing its consumption and sales of machine tools.

Apr 30, 2001

Due to a series of new economic policies, China is rapidly growing its consumption and sales of machine tools.

In 1999, the Chinese government adopted a series of policies geared towards stimulating the country's economy. Tactics included increasing state debt and investment, offering export tax rebates, and spurring an increase in urban people's income. The policies were a success, and China has reaped the benefits almost immediately. According to the China Machine Tool and Tool Builders' Association (CMTBA), gross domestic product (GDP) in 1999 was up by 7.1% over 1998, and the GDP grew by 8.2% in the first three quarters of 2000, reaching $748.5 billion (U.S.).

Also during the first three quarters of 2000, China's industrial output rose 11.6%. That 2.3% increase, over the same period in 1999, represents the highest three-quarter growth rate of the past 3 years. Investment in fixed assets reached $162.5 billion, up 12.9%, which was 4.8% higher than in 1999. The country's revenue rose 21% to $115.2 billion, and China approved 15,732 foreign-invested projects — up 23.3% from the same three-quarter period in 1999.

China's export and import activities are expected to reach $410 billion in 2000, surpassing a $400-billion goal set in a five-year plan started in 1996. Customs' statistics indicate that the country's exports reached $182.3 billion during the first three quarters of 2000, an increase of 33.1% from 1999. And imports reached $163.1 billion, a rise of 38.7%, leaving China with a trade surplus of $19.2 billion.

CMTBA says that China plans on a continued active fiscal policy to stimulate domestic demand and maintain rapid, sound, and sustainable economic growth.

Economic prosperity has also extended into the Chinese machine tool industry. For instance, the latter half of 1999 saw the end of a five-year industry decline in production and profits. Starting in 2000, machine tool production reached a stage of stable and continuous growth.

CMTBA reports that the machine tool sector as a whole has experienced a 16.53% growth increase for 2000 as compared with the same period in 1999, and the production of CNC machine tools has also ramped up substantially.

The country witnessed a 28.69% increase in machine tool imports during the first three quarters of 2000 as compared with the same period the previous year. This surge of imports was attributed to new funding for technical renovation projects that increased the demand for machine tools from China's aviation and automobile sectors.

Metalcutting machine imports reached $872 million in the first nine months of 2000. When bench drills, grinders, and polishers were excluded, the imports for metalcutting machines were worth $838 million. Of the total, machining center imports were $154 million, accounting for 18.4%; special-purpose machine imports were $132 million, accounting for 15.7%; and lathe imports were $113 million, accounting for 13.4%. CNC products make up 67.3% of total imported metalcutting machines.

Of all the metalcutting machines, gear cutting machines represented the highest growth in imports, rocketing ahead 222.55%. The imports of special-purpose machines also experienced a substantial increase of 57.55%.

The demand for imports of special metalforming machines in China has grown enormously. Among metalforming equipment, the dollar value of machines other than traditional press, bending, shearing, and punching machines accounted for one third of the total and represented a rise of 50.65%.

China's government has further stimulated the demand for machine tools by developing its vast Western areas and enhancing efforts to promote technical renovations in enterprises. The domestic consumption of metalcutting machine tools in 2000 should hit $4 billion, of which imports will be between $1.8 and $2 billion. And machine tool demand is expected to strengthen even more in 2001.

The Chinese government also has working policies to pump up machine tool export. Currently, the export of machinery and electronic products ranks number one, and machine tool export has increased yearly since 1990.

In 1999, China exported machine tools and tooling worth a total of $609 million, up 15.96% over 1998. The export volume of metalcutting and metalforming machines in 1999 increased by 54.1% from 1998, but its value declined 3.28% for a total of $227 million. From January to August 2000, China exported $191.4 million worth of machine tools, up 36.13% as compared to the same period in 1999.

Import growth of machine tools for the first three quarters of 2000

Value order

1

2

3

4

5

6

7

8

9

Category

Measuring tools and instruments

Woodworking machines

Machine tool accessories and attachments

Die-casting machines

Metalcutting machines

CNC systems

Metalforming machines

Cutting tools

Machine tool jigs

Value growth % (same period '99)

72.49

70.32

58.93

51.61

29.58

26.5

20.37

3.09

-21.96

Import value of machine tools for the first three quarters of 2000

Value order

1

2

3

4

5

6

7

8

9

Category

Metalcutting machines

Metalforming machines

Woodworking machines

Machine tool accessory & attachments

CNC system

Machine tool jigs

Cutting tools

Die-casting machines

Measuring tools and instruments

Value in $100 million U.S.

8.72

4.55

1.83

1.35

1.15

0.58

0.56

0.43

0.07

CIMT200l - China's seventh international machine tool show

Builders' Association (CMTBA) plays an integral role in stimulating the Chinese machine tool economy. The association edits China's World Manufacturing Engineering and Market Magazine and also hosts China's International Machine Tool Show (CIMT).

The Seventh China International Machine Tool Show (CIMT2001) was held in Beijing at the China International Exhibition Center on April 19-25, 2001. Since 1989, CIMT has had six successful shows put on by the China Machine Tool and Tool Builders' Association (CMTBA). Since that year, the event has showcased thousands of companies, products, and equipment from the global manufacturing community.

Because of its growing success, CIMT is now the most important and significant machine tool show in China. It is the biggest, both in terms of exhibition area and number of exhibitors and visitors, and it is the largest, not only by its quantity of advanced exhibits, but by its volume of business. CMTBA also reports that its show has been recognized as one of the top four most competent international machine tool shows in the world.

There were 180,000 attendees at CIMT'99, and the total exhibition area occupied 60,000 m 2 , with 1,035 exhibitors from 25 countries and regions worldwide. According to CMTBA, part of the success of CIMT'99 on a newly completed exhibition hall and the marked progress of China-made CNC machines.

CIMT2001 was the first show held in Beijing since China's entry to the world trade organization. The 2001 show boasted more overseas customers, distributors, and importers coming to the show to purchase China-made products like CNC machines. CMTBA reports that CIMT2001 showcased China's progress and helped maintain a lucrative and prosperous Chinese international machine tool market.